Microsoft Brings Windows Azure Cloud to China

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The Windows Azure public cloud is coming to China.  Microsoft has signed a Memorandum of Understanding (MOU) with the municipality of Shanghai, and signed agreement to license Microsoft technologies to 21Vianet, who will offer Azure in China out of local data centers. Customers can also use Office 365 and Windows Azure directly from Microsoft data centers in Singapore and Hong Kong.

21Vianet will also be offering Office365, the SaaS Office offering. The Shanghai government also announced it will adopt both Azure and Office365 from 21Vianet, once they’re available.  This is a major part of Microsoft delivering their cloudOS vision to China, which aims to deliver multi-tenant public and private cloud services to millions of businesses in China.

Microsoft first announced it was expanding into China in September. The company has been increasing its investment in the country through new hires, researching local requirements and a general expansion push. This included the hiring of 1,000 additional employees over the year, as well as bumping up the R&D investment in China 15% from the current half a billion. In terms of geographical expansion, its moving into 15 provinces and 20 cities. This news also follows the recent launch of windows server 2012. Microsoft’s vision is to offer cloud solutions across on-premises, owned data center or using Windows Azure public cloud.

So with quite a few international announcements this week, it’s now time to ask: Why China? Simply, it’s a massive market with tons of upside.

Companies and local governments are looking to cloud to improve productivity. China is the world’s largest market, with a lot of room to grow. A recent Forrester Research report on cloud computing (Forrester Research’s "Sizing The Cloud Markets In Asia Pacific" released Feb. 3, 2012) found that the public cloud market in China will grow from $297 million in 2011 to $3.8 billion in 2020.

Microsoft is striking early, as there is no clear cloud leader in China as of yet. Amazon Web Services, the chief competition, offers EC2 in Tokyo and Singapore, as well as edge locations in Osaka, Hong Kong, Singapore, and Sydney. But for the most part, China is a market yet fully untapped by anyone.

But like the Telehouse Russia announcement, China is a huge market that is not without its potential issues. Several technology companies have had a hard time with Chinese expansion plans. Google has had its tiffs with China, including Google rerouting searches through Hong Kong at one point, Go Daddy stopping domain name registration, and other problems with Chinese censorship and high piracy rates (which don’t really affect public cloud, but still) in general across the tech landscape.

Microsoft’s cloudOS strategy and vision is a combo of Azure and Windows Server 2012 to form a platform to build regardless of preferred language, tool or frameworks. It’s been adding support for PHP, Node.js, and other languages in support of this vision. The company added new features to Azure this week, including a distributed cache feature which has drawn a lot of interest.

In other news,  Microsoft also announced that Azure will be supporting Halo 4’s launch and multiplayer experience, with millions of concurrent players expected, Satya Nadella , president of Servers and Tools business, said on his blog.